The Irish Budget was announced on Tuesday (October 14th 2008) by Finance Minister Brian Lenihan. The Minister for Finance has said an increase in the number of people travelling North of the border to do their shopping had made things 'very, very difficult' when he was framing the Budget.
He said there was huge loss of revenue to Northern Ireland, because of the number of goods and services being purchased there by shoppers from the Republic. The Minister said this substantial expenditure meant the Government had to impose higher taxes for essential public services.
The following key elements from the budget may affect frontier workers or those thinking of moving or retiring across the border.
- In the Budget, the Government decided to end the automatic entitlement to a medical card for people aged 70 and over and this will take effect from 1 January 2009. Entitlement to a medical card will now be means tested with a weekly income limit set at €700 for a single person and €1,400 for a couple. The HSE will write to all people aged 70 and over informing them about the new arrangements.
- People who own holiday homes in the Republic of Ireland will have to pay a tax of 200 euro per year to the local authority. The charge will be used to support the provision of local services and will come into effect in 2009. It will be payable by the owners of private rented accommodation, holiday homes and other non-principal residences.
- It was announced in the Budget that Child benefit for 18-year-olds is to be phased out. Child benefit will be halved for 18-year-olds taking the amount to €83 per month from 1 January 2009 and will stop from 1 January 2010.
- Third level institutions are being allowed to increase student registration fees by more than 50% from around €900 to €1,500.
- A new income levy is being introduced. The levy will apply at the rate of 1% to gross income up to €100,100 per year or €1,925 per week. A rate of 2% will apply to income over that amount. The levy is paid on gross income, before deductions for capital allowances or contributions to pensions. It does not however, apply to social welfare payments including contributory and non-contributory social welfare pensions. The levy is effective from 1 January 2009.
- From 1 January 2009, the PRSI contribution ceiling will increase from €50,700 to €52,000. Therefore you will not pay social insurance on the income above this amount.
- The standard rate of VAT will be increased from 21 to 21.5 per cent with effect from 1 December 2008. This increase will apply to all goods and services which are currently subject to VAT at 21 per cent.
© Northern Ireland Association of Citizens Advice Bureaux (NIACAB) 2008
